Dealing with disruptive technologies from within

When Chris Cheung and Thomas Heermann, two middle managers at the software company Autodesk, first showed off their new iPhone drawing app, they got some skeptical looks. Why would anyone want to doodle on that tiny screen? And what could a $2.99 app matter to a company with around $2 billion in annual revenue?

This is a great example of how the app economy changes things and how adaptive companies deal with that change,

Two middle managers, charged with working on one project, are able to see the possible impact of new technology on their products. The app economy allowed them to bootstrap themselves without much investment of time, resources, or even permission from the company.

The products their small group created were big hits. The managers hoped for 100,000 downloads in a year. They got one million in 50 days.

These sorts of numbers are disruptive and mind boggling to a company with revenues in the billions. In fact, their entire PC-driven business could disappear in a few years due to this sort of economy – one where new competitors can arise so fast.

But Autodesk essentially competed with itself, now knows what is needed and could expand rapidly into this new niche.

Heermann thinks the timing of the apps may prove critical because consumer-style products are beginning to gain popularity among the corporate workforce, a phenomenon known as consumerization. That shift could spell trouble for companies that are slow to adapt. Now that Autodesk is a top-ranked app seller, says Heerman, who is now the company’s director of consumer products, “it’s almost like having the company shape up and get ready for the future.”

Disruptive technologies always start small and in niche areas. #12 million is small potatoes to a billion dollar company. But that small amount can grow and is Autodesk is snot adaptive enough, could eventually destroy Autodesk”s value.

Now, however, the disruption is happening inside and Autodesk might be resilient enough to capitalize.

Because one thing that disruptive technologies do – they destroy business models.